Megatrends

The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.

Interbev 2012: The Appeal of Simplicity

From October 16-18, 2012 Nuremberg Messe North America, along with the American Beverage Association, hosted the Interbevtrade show in Las Vegas, Nevada. The show featured exhibitors across a broad swath of categories, from new beverage brands and packaging options to ingredients and supply chain solutions. Attendees also had the opportunity to go to presentations about market trends, sustainability, and technical/regulatory concerns affecting all industry players. Euromonitor had the pleasure of kicking off the event with a presentation on global soft drinks trends as well as meet with many beverage brand representatives on the trade show floor. After three days of sharing insights and tasting products, it was clear that added functionality was the theme for new products. But, amidst the flurry of new form and function, the relatively simple message of fruit and vegetable juicesleft a lasting impression.

The “postmodern” market

As discussed in Euromonitor’s presentation, the concepts of global markets can be categorised as traditional, modern and post-modern. (For a more detailed discussion on this new way to view these markets, please see From Traditional to PostModern: The Evolution of Soft Drink Drinking Habits). A postmodern market, in terms of soft drink consumption, is characterised by high consumption of organic and/or fortified/functional beverages, with a growing presence of health food specialist retailers. As such, when evaluating the prospects of postmodern markets, especially one like the US, the abundance of brands and product development have required beverages to focus on a product’s story, i.e., “what can a product do for me that justifies its higher price?”

Such mentality was apparent in the products presented on Interbev’s show floor. As explored below, “innovations” in beverages for the US often come in terms of added value in an attempt to both differentiate a product in a crowded segment as well as validate increased costs. These innovations can come from new packaging, new “better-for-you” claims, and even new flavours. Let’s examine a few of these products closer and assess the strengths of their added value as well as explore weaknesses.

Tap the Cap: Innovations in powdered concentrate delivery

Tap the Cap

According to its website, Tap the Cap is “an innovative dosage/dispensing cap that’s redefining and reinvigorating the bottled water market.” Representatives at Interbev showcased the ability of the packaging to brand these caps with their own emblems and logos as well to stand out in a crowded sports and energy drinks segment. As Euromonitor data shows, the US sports and energy drinks, bottled water, and concentrates categories are positioned for growth with 22.2%, 17.7%, and 8.6% forecasted from 2011-16 in terms of off-trade value absolute percentage growth, respectively. As such, Tap the Cap has potential by playing in terms of all three categories. Furthermore, the cap’s design allows manufacturers to fill the caps with their own powdered concentrates and sell along-side bottled water while minimising shelf space. However, a large reason for the success of concentrates in the US is the recent launch of Kraft’s MiO, a liquid concentrate that allows consumers to control how much or how little flavour they would like to add to their water. The way Tap the Cap is currently designed, consumers will not be able to refill their own caps, thereby taking away this customisation as well as creating unwanted waste for a bottled water category already under fire for its environmental impact. Overall, while sound in concept, these drawbacks make the package too burdensome for long term success.

Alkazone Water: bringing (pH) balance to consumers?

Alkazone Bottle Water

Alkazone’s has moved beyond purifying tablets into the growing bottled alkaline water trend with their new PET bottled water. Representatives for the water purifying company touted the benefits of alkaline water over other bottled waters, and even showed a pH test comparing their product against other popular brands. The company contends that “the body needs more alkaline water for a truly functioning healthy system” drawing on medical data that shows the body draws on its own alkaline to neutralise acid from other beverages. Alkaline water is a growing trend in the US bottled water category as more consumers are subscribing to the idea that the body’s higher acidic levels can be counterbalanced with this beverage, thereby promoting health, healing and recovery.

The pH tests above show that Alkazone is the only water above the “recommended” pH level of 9.5. The water is also infused with minerals and features antioxidant properties. But the manufacturer will be hard pressed to find a retail space to explain all these claims and hold consumers captive long enough to register. However, if the tenets of alkaline water become more mainstream, Alkazone could emerge as a category leader.

Age Defense Water, by Bona Vita Rx, are “bottled waters” to be consumed as part of a three step system: 1) Intense energy and immune support; 2) appetite control; and 3) relax and recover. The beverages are actually nothing like bottled waters, and taste very similar to energy drinks. When looking at the ingredients from the “intense energy and immunity support” line, high amounts of guarana and caffeine would support a similar classification. However, the product is clearly positioned for women and touts its inclusion of 100 mg of active trans-resveratrol, whom the representative claimed is “the most potent and promising anti-aging antioxidant recently discovered.” Whereas the beverage wins some points for staying at the forefront of trends, as well as a clean branding that is consistent with its target audience, the overall taste due to energy components and artificial sweeteners combined with dubious health claims may hold this product back.

Beverages such as this were common-place at the trade show. Whether it is a new whey protein or an energy infused goji-berry extract, the concept of functionality as a differentiator was so commonplace that it had the reverse effect. The more promises a beverage made, the less memorable that beverage became. As such, it was refreshing to see something as simple as “blended fruit and vegetable juices” to finish the show.

Raaw Juices: Clean message compliments clean flavours

Raaw Juices

Fruit and vegetable juices were not particularly prevalent at the trade show, but when encountered, they were a pleasant change of pace. After a plethora of energy shots and drinks, flavoured and functional waters, and even an (admittedly interesting) taste of a kvass/ginger malted beverage, Raaw juices stood out amongst the masses because of its one simple claim: “It tastes raw.”

The performance of fruit and vegetable juices in the United States, and in particular 100% juices, may be the reason for the category’s relatively small participation at the show. 100% juices are down 3.2% in terms of off-trade retail value since 2006 and are forecast for a continued 3% decline from 2011-2016. A large reason for this poor performance is the high prices of juices post-recession and also a concern for caloric intake. However, brands such as Raaw juices have helped reduce some of these concerns with their fruit and vegetable blends. While Raaw’s flash pasteurisation and cold-fill process is still premium, it is not as costly as the HPP process of Harmless Harvest, Evolution Fresh, and Blueprint Juice. Furthermore, their blend of fruits and vegetables lowers the calorie concerns of 100% pure fruit mixes. But, more importantly, the beverage just plain tasted good. The slogan on the bottled says “It Tastes Raaw,” and the packaging showcases the amount of fruits and vegetables that go into the blend. Whereas this analyst did not have the ability to taste test the beverage against something freshly juiced and blended, the taste was undeniably clean and crisp. More importantly, however, the concept of “100% fruit and vegetable juices are good for you” did not require a pH test or an explanation of ingredients. The message was as clear as the ingredients listed on the side of the bottle.

Overall, the Interbev trade showroom floor was a strong representation of the trends and insights shared in the educational sessions. The concept of added value was seen in virtually every beverage on hand. In this postmodern market, where market fragmentation and functionality can obscure real innovation and winning ideas, it is important to remember that sometimes the simplest ideas are the easiest to convey.